All this came as Russia's oil revenues continued to fall along with slumping prices worldwide. The value of Russian crude-oil exports fell 25 percent in the first quarter of 1998 from the corresponding period a year before. Gas export receipts dropped 14.7 percent. In both cases more products were shipped but lower prices knocked down revenues.

The drop in oil prices alone has cost Russia about $4 billion in 1998, the government estimates. Not only does this wreak havoc with the budget, it threatens to turn around the nation's trade balance. Russia ran a surplus of nearly $20 billion last year, but that could evaporate in 1998 given that the nation has little to export beyond its raw materials.

The result is "a tremendous drop in the economy and tremendous pain for the people," said James Krupa, director of business intelligence at Amoco Corp. in Chicago.

The bleak outlook in the oil industry, at least in the short term, caused another piece of bad news to befall the Kiriyenko government this week. The planned $2.1 billion sale of a controlling stake in the state-owned Rosneft oil giant fell through when no one offered the minimum bid.

A new auction is to be scheduled, but the government now must wait longer for an injection of cash that will almost certainly be smaller than it had hoped.

This is not how the past six months were expected to play out. Last fall, Russian officials and even some optimists in the world economic community were predicting that 1998 would bring Russia's long-awaited rebound.

Some pundits predicted growth of as much as 3 percent after nearly a decade of declines, and the Finance Ministry boasted that Russia might not need all the money promised by the International Monetary Fund.

But as the Asian crisis hit Russia, and with the ruble under pressure from investors bailing out, the government raised interest rates sharply late last year, abandoning the 21 percent cap the nation had achieved through much sacrifice.

It worked, for a time at least. On Jan. 1, the ruble was shored up and redenominated by slicing off three zeros. Yeltsin boasted that the currency, at long last, was solid as a rock. Officials admitted Russia had been buffeted, but they insisted the net effect was merely a six-month delay in the rebound.

Now, with interest rates soaring to 150 percent, the rebound again appears distant, and a serious plunge may yet await.

The main problem remains the budget deficit; Russia continues to spend more than it takes in. Last year, the deficit ran about 7 percent of gross domestic product.

That's why Yeltsin's announcement this week to tighten expenditures was important. Coming as it did when miners, teachers and almost everyone else in Russia was clamoring for pay increases, the vow to rein in the state's budget showed a strong commitment to the kind of reforms that the IMF and other economists say Russia must undergo to survive. Of course, executing those cutbacks is another matter.